Turns out the pumping business is a very good place to be in this economy.
On July 29 Flowserve (FLS) announced second quarter earnings of a better than expected $1.92 a share and raised its earnings forecast for 2009. The company increased its target for 2009 earnings to $7.15 to $7.75 a share from an earlier target of $6.75 to $7.50.
Sales climbed to $1.09 billion. That was an increase of 6% from the first quarter of 2009 but a decrease of 6% from the second quarter of 2008.
Taking out the effect of a stronger U.S. dollar, on a constant currency basis sales climbed 4% year-over-year.
 Bookings, a key measure of future sales trends, climbed by 7% from the first quarter of 2009.
The company still has a way to go, though, to recover all the ground it has lost in the global slowdown: bookings decreased by 21% (13% on a constant currency basis) from the second quarter of 2008. The company’s order backlog was a little over $2.7 billion at the end of the quarter. The book-to-bill ratio, which compares the value of new orders to the value of orders shipped, came in at 0.95.
Investors can see some very promising growth ahead—in 2010 I’d estimate—in preliminary orders from solar thermal power operators (which concentrate sunlight on a central tower to generate electricity) of $31.5 million for boiler feed water, condensate, cooling water and molten salt pumps. And in $45 million in orders for valves to be used in two nuclear power plants now under construction in the United States.
(Full disclosure: I own shares of Flowserve in my personal portfolio.)
Jim – FLS getting killed after hours. any thoughts on their earnings reports/guidance?
thanks.
Jim… I just found you and have registered, but what I view as extreme remuneration to FLS top executives bothers me… feeling a lot of it should be going to its investors.
Good point Catch22!
Are co’s going to stick it to their longtime shareholders by further liquidating their position?
Jim, your thoughts please.
Hey Jim, do you have any thoughts on Thompson Creek’s announcement regarding their secondary offering? Also, is this something we should be concerned about in general for the market as more companies take advantage of higher stock prices to raise cash?
For stocks in the book portfolio, The Jubak Picks 50, I don’t publish a target price. These are meant to be long-term holdings. As long as the basic trend lasts and the market or market segment doesn’t get way overpriced (again) you should keep these in your portfolio rebalancing once a year or so. I’ll rebalance this group in December, the one year anniversary of the portfolio.
Jim, Will you be making buy recommendations on your Picks 50 like you used to do with your Best 50?
Jim,
Great info! Thanks. However, what does all this mean with respect to your target price and target date? Do they all stay the same or with the information above do things change? I noticed that on your update for DEERE you provided a one sentence “update” on your Jubak Pick conclusions. This is very very helpful! MANY THANKS for your great work!
bhallock34